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Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
The writer is the founder of Lean In and option B and former director of Meta Operations
This is a critical moment for the United States and its economy. There are disagreements vehement in almost all the problems that occur. But there is one thing we all agree with: we want a strong economy. This is the cornerstone of the national security of the United States, the global position and well -being of our families.
The best way to have a strong economy is to unlock all the potential of women in our workforce. To understand the impact of losing the participation of the female workforce in the United States, I look at Japan. The low birth rates, immigration rates close to zero and the underutilization of women’s skills were main drivers of three decades of economic stagnation. Between 2000 and 2022, Japan’s labor productivity fell from around 70 percent of the United States to only 58 percent.
In 2013, Prime Minister Shinzo Abe launched an economic plan, “Womenomics”, aimed at reversing this tendency to obtain more female participation in the labor market. But to date, Womenomics only has Partially happened. While more Japanese women are working, almost half are in part -time or temporary jobs. Japan’s gender salary gap is found in an amazing 32 percent.
The United States faces similar forces that could lead to stagnation. It is projected that population growth decreases to 0.25 percent in 2038. Immigration is expected to decrease in the coming years. And women remain underrepresented in the workforce at all levels, in each age cohort and in almost all sectors.
The participation of the workforce among American women is 57 percent, compared to 68 percent for men. That is a difference of 11 points, although women represent half of the population. The gap exists at all ages. Worse, for workers in their most productive years (ages of 25 to 54 years), the participation of women in the United States has stagnated and is lower than that of Japan.
The leadership gap in the United States is even more pronounced. Women earn 59 percent of university degrees, but represent only 11 percent of Fortune 500 CEO. This is not due to lack of ambition; Women are so interested in moving forward and they are likely to request a promotion as men. To accept disparity in leadership, I would have to believe that male university graduates have almost 12 times more talent than their female counterparts. Clearly, that is not the case.
If we close these persistent gender gaps in the participation and leadership of the workforce, our economy, and our country, will be stronger and more competitive.
If the participation of the women’s workforce in the United States reaches the highest levels observed in other G7 countries, there would be around 7 million women more in our workforce and our economy could grow an additional 4.2 percent. This is a significant impulse since the US economy has grown less than 2 percent per year, on average, since 2015.
Multiple studies show that taking advantage of women’s talents also directly benefits companies. Companies with women in at least 15 percent of senior management report 50 % higher profits than those with women in less than 10 percent of leadership roles, according to a 2016 management study by Credit Suisse.
It is not about having fewer men in the workforce; The more people we have, the better. In my time in the US Department of the US, and through decades working in Silicon Valley, I have seen first hand that when it takes advantage of the talents of the complete population, it is based on the best available. I should not surprise that this promotes more economic growth and a better performance of the company.
Unfortunately, we live in a culture that does not always encourage women to lead or welcome their contributions. There are still systemic barriers, and this is especially true for colored women.
This is not only slowing down to those people, but it is braking our entire economy. This was true in 2013 When I wrote LeanAnd unfortunately it is still true today.
Now more than ever, companies must remain committed to the progress of women. It is not a special treatment, it is about leveling the playing field. This means ensuring that all women have access to tutoring, sponsorship and networks that men have had for a long time. It means addressing the generalized prejudices that are brought on the way to hire and promote the best people. And it means that companies need to believe in women’s potential, and give them the same opportunities to prove their worth that we know that men are receiving.
This is not just a matter of equity; It is an economic imperative. If the United States must continue to be competitive, safe and maintain its position as an economic superpower, we need to unleash the maximum potential of women.